Car insurance premiums are squeezing budgets across the country. As of June 2024, the average cost of car insurance has increased by 19.5% compared to 2023, as reported by the US Bureau of Labor Statistics. If you’re struggling to keep up with the rising costs, it’s time to take action. This article will provide tips to help you reduce your car insurance premium without compromising essential coverage.
Shop Around for Cheaper Car Insurance
Shop for car insurance every year or two, even if your premium hasn’t increased. Get quotes from several insurers to find the most competitive car insurance price. Don’t just focus on price; check the company’s financial strength to ensure they can pay claims. Read your contract carefully to understand what’s covered.
Raise Your Deductible
Increase your deductible to save more on your car insurance premium. You can reduce your monthly costs by choosing to pay more out of pocket in case of an accident. While lower premiums are appealing, consider your financial situation before choosing a higher deductible.
Install An Anti-Theft Device
Installing an anti-theft device can significantly reduce your car insurance premium. Twelve US states mandate insurers to offer discounts for these devices. Popular options include car alarms and LoJack systems. While savings vary by insurer (e.g., GEICO offers up to 23%, Esurance 5-25%), the potential cost-benefit is worth exploring.
Bundle and Save
Insuring multiple vehicles with the same company often leads to significant discounts. Think of it as a bulk rate for your cars. To qualify, drivers usually need to live together and be related, but some insurers offer discounts for unrelated joint owners as well. Most insurers offer multi-car discounts, often up to 25%. Erie Insurance is the best choice, boasting an average annual cost of $1,839 for multiple vehicles – a whopping $1,000 less than the national average.
Get A Good Student Discount
Having a teen driver can significantly increase your car insurance costs. However, the good news is that they also offer good student discounts. Maintaining good grades is vital, with discounts of up to 25% available for students with a B average or higher. State Farm stands out as a top choice, offering discounts like Steer Clear, Drive Safe & Save, and student away-at-school benefits. By combining good grades with safe driving habits, college students can enjoy substantial savings on their car insurance.
Drive Safely
Safe driving equals savings. Accidents and traffic violations skyrocket insurance costs. A clean driving record can earn you insurance discounts offered by many insurers, like Travelers. Remember, every mile you drive safely brings you closer to lower premiums.
Cut Your Commute
Driving less can lead to lower car insurance premiums. Insurers often base rates on annual mileage, so using public transportation for your daily commute can save you money. Be aware that significant mileage reduction is usually needed for discounts, so check your insurer’s specific guidelines. Safeco Insurance provides a low-mileage discount. You must supply Safeco with your vehicle’s odometer reading and annual mileage estimate to maintain your discount.
Compare Insurance Quotes Before You Choose a Car
The type of car you drive affects your insurance cost. Insurers consider a car’s claim history when setting rates. Models like the Honda CR-V, Jeep Wrangler Sport, and Subaru Crosstrek are cheaper to insure. At the same time, the Tesla Model S Performance, Lexus ES 300H, and Volvo XC90 T8 Inscription are often pricier. Compare insurance quotes for different models before buying.
Switch To Black Box Insurance
Black box insurance incentivizes safe driving by offering lower insurance rates based on driving behavior. A device records your speed, braking, acceleration, and more. Insurers use this data to calculate your risk and adjust your rates accordingly. While it might seem like constant surveillance, it could lead to significant savings if you’re a cautious driver. Allstate’s Drivewise program offers an initial discount for enrolling and additional savings every six months for maintaining safe driving habits.
Ditch Unnecessary Coverage
Scrutinize your insurance policy for features you may not need. Opting for features such as roadside assistance or rental car coverage may result in higher insurance costs. If your credit card or auto club membership provides roadside benefits and you rarely rent cars, you might not need these add-ons. Contact your insurance provider and inquire about removing specific coverage options.
Complete A Defensive Driving Course
Defensive driving courses can save you money on car insurance premiums. While eligibility often requires a clean driving record, the potential savings can be significant. However, checking with your insurer beforehand is essential to understand the specific requirements and discount amounts. Ensure the course is accredited and worth the investment. GEICO offers discounts to policyholders who complete defensive driving courses, helping you save on your car insurance.
Upgrade Your Car’s Safety Features
Boosting your car’s safety features can lower its insurance premiums. Features like anti-lock brakes, airbags, and security systems often qualify for discounts. Check with your insurer to see which upgrades could save you money. Several major insurers, such as Progressive, State Farm (Drive Safe & Save™), GEICO, Allstate (various discounts), and Liberty Mutual (partnering with Volvo), offer discounts for vehicles with advanced safety features.
Explore Extra Discounts
Check for additional savings by paying your premium upfront (annual or semi-annual), opting for paperless billing, or exploring discounts linked to your memberships or affiliations. While these can add up, always compare the discounted rate to the standard price from multiple insurers to ensure you’re getting the best deal. You might be eligible for insurance savings through your membership in professional groups such as the American Bar Association or American Medical Association. Active-duty military personnel, veterans, and their families might qualify for discounts through specific insurance providers.
Where You Live Impacts Your Premium
Your location significantly influences car insurance rates. If you’re considering a move, factor in the potential change in insurance costs. While relocating solely for cheaper insurance might not be practical, understanding the financial impact is crucial. Generally, states with lower population density, accident rates, and a lower cost of living tend to have lower car insurance premiums. Midwestern states like Iowa, Ohio, Indiana, and Michigan often have lower average premiums.